How Carbon Pricing Can Decarbonise European Heavy Industry

Summary:

Prices on the European carbon market continue to climb, as Europe’s climate targets – and its policies – have become more ambitious. That is a welcome change from the first 15 years of the EU’s Emissions Trading Scheme (ETS), when heavy industry found that emitting carbon was so cheap that reducing emissions was not worth the hassle. A carbon price that bites is a necessary tool to reach the EU’s climate goals. But a high price poses a challenge for Europe’s heavy industry, which competes globally with producers who are not (yet) subject to comparable carbon pricing. To decarbonise heavy industry, the EU needs a high and stable carbon price, an end to free emission permits, a level-playing field with foreign competitors, and support for green investment.

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